Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.

IMPORTANT MESSAGE to our Member/Owners from your Board of Directors and Management Team:

March 27, 2009  

To our members:

There are currently stories in the news about the NCUA’s conservatorship of two Corporate Credit Unions.  NCUA placed both US Central Federal Credit Union and WesCorp Federal Credit Union under conservatorship on Friday, March 20, 2009 to stabilize the corporate credit union system.   These two credit unions do not serve you, the consumers.  Instead, their job is to provide liquidity, investment and payment services to natural-person credit unions such as your University Credit Union.  These corporate credit unions are still operating normally with the NCUA directing their operations.  The actions taken by the NCUA were made to ensure the safety and soundness of the entire Credit Union system. 

As we reported to you in early February 2009, the NCUA has enlisted the help of natural person credit unions to assist in correcting the current challenge faced by the Corporate Credit Union system.  Credit Unions are taking care of their own through this arrangement and are not seeking funds from the government for bail-out monies.  Natural person credit unions like your University Credit Union operate as not-for-profit entities and therefore do not pay income tax.  It is then only right that credit unions not look to the government for assistance in the form of taxpayer dollars.  It is right and proper for credit unions to find their solutions within the confines of the credit union industry and the actions of the NCUA's Corporate Stabilization Program look to be a suitable resolution.

Overall, the credit union industry is safe, solid and healthy.  "Credit unions that serve consumers remain very strong" is a recent quote by Michael Fryzel, Chairman of the  NCUA.  The Wall Street Journal recently said that while some of the "corporate" credit unions have had problems, in today's economy, natural person credit unions like your University Credit Union continue to be a safe haven offering great value.  The Credit Union industry is well capitalized with an average capital ratio of 10% and can absorb the costs of the NCUA's Corporate Stabilization Program with minimal impact to the nation’s 90 million credit union members.  Please understand that the cost of this program to natural-person credit unions, including your University Credit Union, is bearable and necessary.

We want to reassure you, that it is business as usual at University Credit Union.  Your services are not affected at all by these government actions and your funds on deposit are perfectly safe.  Your credit union deposits are federally insured up to $250,000 by the National Credit Union Share Insurance Fund and backed by the full faith and credit of the U.S. Government.  No credit union member has ever lost one dime of federally insured funds.

Your University Credit Union is extremely well-capitalized.  Our capital position, at approximately 14.0%, is very strong and ranks very high in our industry and in the entire financial services industry as well.  This means your University Credit Union can weather the current economic conditions with minimal impact to our members.  
The Credit Union industry can and will continue to assist the Corporate Credit Unions to get past the current economic situation.  The industry will move confidently forward into the future in the true credit union fashion of "People Helping People".  Your University Credit Union will continue providing you with "World Class Member Service" in a safe, sound and financially stable fashion.

February 2, 2009  

We’re all aware of the excruciating stress placed on the current economy.  Bail-outs are evolving as the savior for the strife experienced by what seems like every industry.  Please rest assured that in these troubled times your University Credit Union remains safe, sound, and strong.  Your deposits are safe and insured to $250,000.00 at your University Credit Union.  Your University Credit Union has excellent capital, investments and earnings, has money to lend and will continue to “walk the talk” of “World Class Member Service!”

You may have read the recent press releases dealing with current challenges experienced by the Corporate Credit Unions.  A simple definition of a Corporate Credit Union is the credit union’s credit union.  In other words this is where your University Credit Union processes its’ financial transactions.  Please understand this recent news in not about natural person credit unions, which are credit unions that are owned by their members who are America’s consumers, like your University Credit Union. 

These news articles discuss Corporate Credit Unions being faced with financial issues due to the diminished value of their investment portfolio and growing liquidity concerns.  In the true spirit of cooperatives, the regulator of credit unions, the National Credit Union Administration (NCUA), is enlisting the help of natural person credit unions to assist in correcting this current challenge faced by the Corporate Credit Unions. The NCUA is working to help Corporate Credit Unions meet and beat this challenge with a program entitled the Corporate Stabilization Program. 

Although this is not a desirable situation for the natural person credit unions this "credit union helping credit union" arrangement is much more advantageous than looking to the federal government for bail-out monies.  As you know, natural person credit unions like your University Credit Union operate as not-for-profit entities and therefore do not pay income tax.  It is then only right that credit unions not look to the government for assistance in the form of taxpayer dollars.  It is proper that credit unions find their solutions within the confines of the credit union industry and the NCUA’s Corporate Stabilization Program looks to be the suitable resolution.

Please know that the cost to natural person credit unions, including your University Credit Union, is bearable, and becomes hopefully a one time necessity.

We can and will help the Corporate Credit Unions get past this situation and move confidently forward in the true credit union fashion to bring you “World Class Member Service” from your safe, sound, and strong University Credit Union.

In the wake of this extended period of economic turmoil your Board, Management and Staff Teams want to let you know that your University Credit Union is a very safe and sound financial institution.  Some of the facts about your University Credit are as follows:

• Excellent capital (equity) at 14.71% over 2x the required amount to meet the regulatory “well-capitalized” level of 7.00%
• Solid earnings to continue the building of capital strength during these challenging times
• Extremely low delinquency in the loan portfolio with equally low charge-offs
• A solid loan portfolio with no sub-prime paper
• A solid investment portfolio with no sub-prime backed investment paper, a good cash position, and extremely fine quality investments
• Governed and managed in a prudent and conservative fashion
• Solid deposit and asset growth for 2008
• In these times of uncertainty your University Credit Union wants our member/owners to know that their funds are safe, their financial institution is strong and that we’ll be here for you today, tomorrow, next year, and for years to come.

In addition to this excellent financial strength we want to remind all member/owners that deposits at your credit union are insured by the National Credit Union Share Insurance Fund (NCUSIF).  This fund is backed by the full faith and credit of the United States Government.  The NCUSIF is managed by the National Credit Union Administration (NCUA) and provides insurance coverage on each properly established account to a limit of $250,000.00.  Also, Traditional, Roth IRAs and KEOGH retirement accounts are insured to limits from $100,000.00 to $250,000.00.  Not one penny of insured savings has ever been lost by a member of a federally insured credit union.  For more information on your valuable coverage please visit the NCUA website at: http://www.ncua.gov/ShareInsurance/Index.htm. and http://www.ncua.gov/shareinsurance/SpecialBulletin.pdf  

With the current state of the economy, the recent news about the IndyMac Bank failure and the issues with Fannie Mae and Freddie Mac, we want to take this opportunity to let you know that your funds on deposit at University Credit Union are safe and secure. Your University Credit Union was not involved in the underwriting or purchase of sub prime mortgages during 2007 or 2008.  In addition, your University Credit Union is not currently experiencing the secondary fallout of this debacle.  Many other financial institutions are suffering with the ill-effects of rapidly increasing delinquencies and subsequent charge-offs on loan types such as automobile and credit cards from those consumers who were erroneously placed into sub primes by other institutions.  The loan portfolio at your University Credit Union is solid.   Also, your management team continues close oversight of the credit union’s investment portfolio realizing safe, yet above market yields on the bulk of the funds.  In addition, your University Credit Union has an extremely sound equity position with well over 14% capital, more than double the regulatory requirement of 7%.  Your University Credit Union is a safe, sound and conservative financial institution and we will weather the current economic storm with you, our valued member/owners.

The most recent Summer 2008 University Credit Union Newsletter also contained a “Dear Members” article on this specific topic.  A portion of the article reads as follows:

“At University Credit Union you can be tremendously confident that you are handling your personal financial accounts with an exceptionally sound, reputable institution! 

Now that we have your attention, please rest assured you are the member and owner of a very strong, solid, financially sound credit union!  Your University Credit Union continues with high-quality assets, consistent earnings, and a firm capital base.  The current delinquency and charge-off ratios are some of the lowest in the industry.  The management of your credit union is market savvy and administrates the credit union operations in a safe, conservative fashion. 

Why are we taking time to discuss these issues?  Because the recent negative press surrounding the economy, the financial markets, and the state of the mortgage and real estate industry has caused great consternation for almost all consumers.  In economic times like these our business senses and observations are especially keen toward any and all signs of question or concern.  These feelings are not only natural, but necessary and prudent!

When viewing or reviewing any and all of your financial dealings please make sure you are comfortable with not only the institution, but the type or level of the account or investment.  If you have any uncertainties or anxiety whatsoever please call an officer of the respective company and discuss your concerns.  Now is not the time to be timid or hesitate in having a conversation.  Remember, it is your money!

As a country, we’ve been here before and we’ll be here again.  We are resilient and our economy is resilient, it’s just a matter of time.  Concerning this current challenge it looks as if we’ll begin to see some light by year-end 2008 and we will actually feel the turnaround by mid-year 2009, barring any unforeseen circumstances.  It’s not fun and it’s not pretty, but it will pass!”

We can confidently assure you, our member/owners that your University Credit Union deposits are safe and secure.  Your University Credit Union follows the time honored credit union traditions and philosophies of “People Helping People”, “Not for Profit, Not for Charity, But for Service” and is constantly in pursuit of “World Class Member Service!”

 Thank you and please remember, we’re here for you.